Senate Oks sales tax increase, but not for all

February 21, 2009

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JACKSON -- The state Senate passed a bill last week to let Jackson increase the sales tax there to improve streets and crime-fighting efforts but declined to give all Mississippi cities and counties that option to raise revenues for their high-priority needs.

Local government leaders throughout Mississippi have begged the Legislature in recent years to let voters decide whether to have a local tax where they lived, but state lawmakers have consistently turned them down.

The Senate voted 43-7 Friday against a proposal to let any city or county tack on another 1 percent to the state''s 7 percent sales tax and use the extra revenues for specific public projects. It would first have to be approved by 60 percent of the voters within the city or county wanting the tax.

"Give them this option. Let the people tax themselves," said Sen. Terry Burton, R-Newton, a former mayor who offered the statewide local-option tax as an amendment to the bill written just for Jackson.

Local governments must get the state Legislature''s permission to impose their own sales tax.

As cities and counties encounter revenue shortages and crumbling infrastructure in recent years, their leaders have been pushing for more sales-taxing authority. They say this would be an alternative to raising already-high property taxes.

However, most legislators object to making people from rural areas pay more to shop in cities when they don''t benefit from the revenue increase.

"What you''re doing with this proposal is imposing a further tax on the poor souls in Chickasaw County to tote all the money and deliver it to Tupelo, which is a trade center," said Sen. Hob Bryan, D-Amory.

"It''s Robin Hood in reverse. You''ve robbed from the poor to give to the rich."

Sen. Terry Brown, R-Columbus, was one of the seven senators voting for the statewide option, even though he''s against letting Jackson increase its sales tax.

"If they''re going to give it to one, they should give it to all to make it fair," Brown said.

Many Mississippi cities have local sales taxes permitted by the Legislature, but they''re mainly limited to restaurants or hotels to raise revenues for promoting tourism or other specific purposes.

Of the 50 states, 38 have local-option taxes levied with state approval by municipalities, counties and special-district governments, according to the National Conference of State Legislatures. Of those states, seven -- including Mississippi -- limit those taxes.

Senate Bill 3268 would allow Jackson voters t o decide whether to raise the sales tax from 7 percent to 8 percent on many items sold in Mississippi''s capital. The levy would stay in place until 2014 to raise an estimated $21 million a year for local law enforcement, fire protection and road repairs.

The House earlier this month passed a similar bill to let Jackson impose a sales tax for general city services.

The House and Senate will continue working toward a final version to send the governor for his signature.

Gov. Haley Barbour''s Tax Study Commission has recommended cities and counties be authorized to levy a local tax on their general sales tax base for specific projects if approved by voters.

The state''s largest city -- suffering a declining tax base, shoddy streets, crumbling water lines and high crime rates -- needs more money to help make it better, said Sen. John Horhn, a Democrat running for mayor there.

"We have what we think are the makings of helping Jackson get out of the financial hole it is in," Horhn said.